Spillover effects and dynamic correlations between spot and forward tanker freight markets

Monitoring and analysing information transmission across different shipping markets is an important tool for participants to predict shipping freight rates, design portfolio investments and manage freight rate risks. The purpose of this article is to investigate spillover effects and dynamic correlations between shipping spot and derivatives markets (tanker forward freight agreement, FFA) under the multivariate generalized autoregressive conditional heteroscedasticity framework. Empirical results show that spillovers in returns are unilateral from one-month FFA to spot markets, while they are bilateral between one-month and two-month FFA markets. However, insignificant mean spillovers between spot and two-month FFA markets are found. Volatility spillover effects among one-month FFA, two-month FFA and spot freight markets are bilateral. By analysing the correlation between different markets, highly persistent and significantly volatile correlations are found. Moreover, time-varying correlations between one-month and two-month FFA markets are much higher than those of between spot and each FFA market. Results from this article will be helpful to improve participants’ predictions of return, volatility and correlation, which are significant for determining hedge strategies. In addition, the management of freight rate risk and portfolio investment can also benefit from the empirical results obtained in this article.     

Comparison of Dynamic Models of Mr Damper for Hardware in the Loop Simulation of Large-Sized Buses

The present study has focused on the comparison of MR damper dynamic models for the purpose of hardware in the loop simulation. A vehicle dynamic model for large-sized bus and a control logic for MR damper was built. Two typical MR damper models, viz. Bouc-Wen and hyperbolic tangent model have been considered in this study and the advantages and disadvantages of each model on the aspect of HILS system is discussed. We discussed the limitations of each model based on the analysis of the vehicle dynamic simulation. The results showed that the existing models are not suitable for HILS system. We proposed the modified hyperbolic tangent model by adopting low-pass filters. The results from the simulation showed the advantages of the modified model which were validated through HILS system.     

Meta-frontier function approach to operational efficiency for shipping companies

ABSTRACT

This study uses a meta-frontier function approach to estimate operational efficiency and technology gaps for shipping companies. Researchers have evaluated the relative efficiency of shipping firms with the assumption that shipping firms operate under one frontier technology. However, the assumption of one frontier technology is being argued by efficiency literature. Therefore, this study estimates relative efficiency of shipping firms in different market segments (dry bulk, liquid bulk, and containerized cargo), possibly operating with different technologies and, hence, under different frontiers. This study uses a meta-frontier function approach that allows us to distinguish separate frontiers for different groups and decompose efficiency scores relative to the meta-frontier. Data used in this study is collected from Thomson One Banker from 2001-2013 in the form of unbalanced panel data. Empirical results suggest that dry bulk firms’ production technology is more advanced than others and the production frontier is the closest to that of the meta-frontier. In addition, efficiency scores are all low, but containerized cargo firms achieve higher technological efficiency than the other two groups. It is also suggested that containerized cargo and liquid bulk firms should prioritize improvements in their production technology and dry bulk firms should prioritize improving group efficiency.     

Robust design optimization of the dynamic responses of a tracked vehicle system

This paper presents the robust design optimization of the dynamic responses of a heavy military tracked vehicle system. The tracked vehicle model addressed in this study has 954 degrees of freedom and consists of 189 bodies in total: 37 bodies for the chassis, such as sprockets, road wheels, road arms, etc.; 76 track link bodies for each track subsystem; 36 revolute joints; and 152 bushing elements. The design objectives were to minimize the maximum vertical acceleration of the hull and its variance while satisfying the wheel travel constraints for torsion bars and the hydro-pneumatic suspension units within ±1σ ranges. To avoid the difficulty of the design sensitivity analysis and to overcome the numerical noise, a progressive meta-model technique was employed in the optimization process. First, space-filling methods were used to determine the minimum number of sample points. Second, the simultaneous kriging method was used to construct the initial meta-models, and the augmented Lagrange multiplier (ALM) method was then used to solve the robust design problems of the meta-models. Third, the new design results were added to the analysis results for the initial sample points, and the meta-models were updated automatically. Next, the optimizer resolved the robust design problems of the updated meta-models. These processes were repeated until the convergence tolerances were satisfied. The robust design optimization of the tracked vehicle system, with 11 random design variables, was solved in only 26 analyses, including 12 analyses for the initial meta-models and 14 analyses added during the iterative optimization process.     

Development of realistic shortest path algorithm considering lane changes

Lane changes occur as many times as turning movements are needed while following a designated path. The cost of a route with many lane changes is likely to be more expensive than that with less lane changes, and unrealistic paths with impractical lane changes should be avoided for drivers' safety. In this regard, a new algorithm is developed in this study to find the realistic shortest path considering lane changing. The proposed algorithm is a modified link‐labeling Dijkstra algorithm considering the effective lane‐changing time that is a parametric function of the prevailing travel speed and traffic density. The parameters were estimated using microscopic traffic simulation data, and the numerical test demonstrated the performance of the proposed algorithm. It was found that the magnitude of the effect of the effective lane‐changing time on determining the realistic shortest path is nontrivial, and the proposed algorithm has capability to exclude links successfully where the required lane changes are practically impossible. Copyright © 2015 John Wiley & Sons, Ltd.     

Virtual Reality Simulation of Fuzzy-logic Control during Underwater Dynamic Positioning

In this paper, graphical-user-interface (GUI) software for simulation and fuzzy-logic control of a remotely operated vehicle (ROV) using MATLABTM GUI Designing Environment is proposed. The proposed ROV...     

Multimodal route choice in maritime transportation: the case of Korean auto-parts exporters

Global offshoring has increased the need for transport of half-finished goods and components, along with finished goods. The auto-parts industry in Korea has also entered the global market as Korean car manufacturers have started to build overseas factories. Maintaining cost competitiveness by minimising total logistics costs will thus be a critical strategy for the industry. This research compares the total annual costs of four feasible transport routes from Korea to the US using the inventory-theoretic model, which encompasses direct transport costs, in-transit carrying costs, and warehouse inventory costs. We apply this model to real transport data collected from a Korean auto-parts company. A static analysis shows that inventory costs can play a decisive role in altering the cost competitiveness of different routes. In addition, sensitivity and scenario analyses with changes in variables and the market situations reveal that the cost structure of each route plays an important role in determining their relative cost competitiveness in varying market conditions.     

The effects of slow steaming on the environmental performance in liner shipping

The environment issue is one of the significant challenges that the liner shipping industry has to face. The International Maritime Organization (IMO) has set a goal to reduce greenhouse gas (GHG) emissions from existing vessels by 20–50% by 2050 and develop the Energy Efficiency Operational Indicator (EEOI) as a measure for energy efficiency. To achieve this goal, IMO has suggested three basic approaches: the enlargement of vessel size, the reduction of voyage speed, and the application of new technologies. In recent times, liners have adopted slow steaming and decelerated the voyage speed to 15–18 knots on major routes. This is because slow steaming is helpful in reducing operating costs and GHG emissions. However, it also creates negative effects that influence the operating costs and the amount of GHG emissions at the same time.

This study started with the basic question: Is it true that as voyage speed reduces, the operating costs and CO₂ emissions can be reduced at the same time? If this is true, liners will definitely decelerate their voyage speed themselves as much as possible so that they can increase their profits and improve the level of environmental performance. However, if this is not true, then liners will concentrate just on increasing their profits by not considering environmental factors. This led the authors to set out three objectives: (1) to analyze the relationship between voyage speed and the amount of CO₂ emissions and to estimate the changes by slow steaming in liner shipping; (2) to analyze the relationship between voyage speed and the operating costs on a loop; and (3) to find the optimal voyage speed as a solution to maximize the reduction of CO₂ emissions at the lowest operating cost, thus satisfying the reduction target of IMO.